Employers in January hired fewer workers than expected, but the nation's unemployment rate sank to 4.7% — the lowest level in more than four years — and job growth in previous months was stronger than previously estimated, the government reported today.
Wall Street sank after the January jobs report was issued as traders feared that the relatively strong report would prompt the Federal Reserve to keep hiking interest rates to moderate the economy and keep price inflation in check. The Dow Jones was down nearly 40 points in early-morning trading.
The nation's nonfarm payrolls increased by 193,000 jobs in January at a seasonally adjusted annual rate, the Labor Department said. That was relatively strong but still below the 250,000 new jobs that many economists had forecast.
Still, economists were pleasantly surprised to see many signs of underlying strength in the January jobs report, including revisions that increased payroll growth in December and November by more than a combined 80,000 workers. Also, more than 60% of industries expanded their workforce in January — the second-highest level in the past 18 months, according to economist Steven Wood.
A relatively strong and broad expansion in payrolls — led by increases in construction, health care, hotels and restaurant and professional and business services — pushed the nation's unemployment rate down to 4.7% in January from 4.9% in December. Last month's unemployment rate was the slowed since July 2001.
"These are all very strong details, and combined with upward revisions to recent payroll gains create a very solid picture of labor market conditions," said economist Joshua Shapiro in a research note for the consulting firm MFR Inc.
Mild winter weather in January contributed to a 46,000 increase in construction jobs, the Labor Department said.
Employment in restaurants and bars grew by 31,000 jobs, and payrolls increased by 24,000 workers in professional and business services, with increased reported in computer system design and management and consulting services.
Retail and manufacturing payrolls were little changed in January.
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